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Keywords:

research, fundamental, technical, investing, analysis, stock, online, trading


After you have determined what phase of the economic cycle the economy is in at the moment, you may begin doing research to find a suitable trade. It is in everyone's best interest to have some kind of procedure in place that will be used prior to EACH deal. To assist you in getting started, here is a straightforward formula consisting of five steps.


The following are the 5 Steps to Investing Online:


1. Look for a stock.

This is the phase in stock trading that is both the most evident and the most complex. Time of year is a decent rule of thumb to consider considering the fact that there are well over 10,000 equities to trade. For instance, while I am writing this, the first day of spring has just arrived. It might be prudent to explore investing in equities that have a history of making runs, or slides, depending on your outlook, around this time of the year.


2. Fundamental Analysis

Although there are many short-term traders who could argue with the need of doing ANY Fundamental Analysis, it is important to be aware of the chart patterns from the past and the news pertaining to the company. Earnings season is a good illustration of this. Caution is in order if you want to play the upside of a company that has fallen short of its earnings objective for the last three consecutive quarters, since doing so might be risky.


3. A Study of the Technicals

At this point, the signs start to become relevant. Stochastics, the Moving Average Convergence Divergence (MACD), volume, moving averages, the Relative Strength Index (RSI), the Commodity Channel Index (CCI), support levels, and resistance levels, together with the rest of the technical indicators. Where you get your education may have an impact on the kind of indicators, either lagging or leading, that you choose for your sample.


When you are first starting out, it is important to keep things as simple as possible; employing an excessive number of indicators might be a fast track to incurring large losses. First, you should get quite familiar utilizing one or two indications. If you educate yourself on their nuances, you'll be in a better position to conduct profitable transactions.


4. Do what you think is best.

As soon as you have a few stock transactions under your belt, you should begin handling them in the appropriate manner. If the transaction is intended to be conducted over a short period of time, be on the lookout for an exit signal. If you are engaging in a swing trade, you should keep an eye out for signs that indicate the trend is changing. If you are planning on holding onto the stock for an extended period of time, make sure to do stock checks on a weekly or monthly basis.


Make the most of this period by staying current on the news, determining your price objectives, establishing your stop losses, and monitoring other companies that you may be interested in owning as well.


5. The image in its entirety

According to an old proverb, the same applies for ships: they all rise and fall with the tide. The odds are stacked in your favor if you have knowledge of which industries are seeing growth.

For instance, if you are bullish (have an expectation that the price will increase) on an oil stock and the majority of stocks in the oil sector are increasing, then it is quite probable that you are on the winning side of the trade. You may receive the knowledge you need by using one of the many trading platforms that will provide you access to information pertaining to the whole industry.